Dive Brief:

• Kohl’s Chairman and CEO Kevin Mansell is set to retire in May 2018, according to a Tuesday press release from the discount department store retailer.
• Michelle Gass, Kohl’s chief merchandising and customer officer, has been appointed as CEO-elect and will serve in the position once Mansell retires, the company said. Gass will also stand for election as a director at the Kohl’s 2018 stockholder meeting. Gass joined Kohl’s in 2013 and, prior to that, had served in various management positions with coffee-selling giant Starbucks going back to 1996.
• Additionally, Kohl’s Chief Operating Office Sona Chawla will begin serving as Kohl's president in May while continuing to serve as the principal operating officer, the company said. Chawla joined the retailer as COO in 2015 after having served in executive positions at Walgreens and Express.

Dive Insight:

Since Mansell joined Kohl’s 35 years ago, the retailer has grown from a regional retailer out of the Milwaukee area to a nearly $20 billion national chain with more than 1,000 stores. During his run as CEO, Mansell helped steer the retailer through one of the worst financial crises in U.S. history as well as an e-commerce revolution that is likely far from over.

"I look forward to this last year of my career, building on the positive momentum we have going into the holidays, furthering the development of our operational excellence and traffic-driving plans and ensuring a seamless transition for our associates, partners and shareholders," Mansell said in a statement. He described Gass, his successor in the chief executive spot, as "an instrumental leader in shaping the future at Kohl’s – one where we continue to put the customer first, focus on innovation, speed and agility, and remain dedicated to the long-term financial health of the business."

Analysts with Jeffries said in a Tuesday note emailed to Retail Dive that they thought Gass and Chawla were likely groomed for their new positions. The analysts viewed both executives as “strong internal promotions, with deep expertise in the omnichannel strategies that will be necessary to drive KSS's next leg of growth.”

Mansell’s retirement announcement follows a change in chief financial officers. Former Supervalu exec Bruce Besanko joined Kohl’s as CFO in July. He replaced longtime CFO Wesley McDonald, who announced his retirement last year.

Earlier this year, at Shoptalk 2017, Mansell said the discount department store chain needed to foster a faster-paced, more agile approach to retailing in order to compete against a broad range of threats including e-commerce and off-price merchants.

"Success for us is probably going to come by becoming an amazing omnichannel retailer, connecting the physical and digital [channels]," Mansell said. "But for the customer, the experience has to get a lot more engaging to fulfill that mission. We have to move faster. We have not used speed. We’re not as agile as we need to be to be a better competitor [to virtual and brick-and-mortar retailers alike]."

Kohl’s had responded to the challenge by making improvements to its in-store experience, as well as testing smaller-format stores in a number of U.S. cities. Mansell noted in March that 85% of Americans live within 15 miles of one of Kohl’s 1,200 locations nationwide, with the vast majority of its 70 million customers still shopping in physical environments. The retailer is also expanding its small-format stores and partnering with the biggest name in e-commerce: Amazon.

In August, Kohl’s reported that second quarter total sales dropped 0.9% to $4.14 billion from $4.18 billion in the prior-year period — beating the Thomson Reuters I/B/E/S analyst projection for $4.13 billion. Same-store sales in the quarter fell 0.4%, a recovery from the 1.8% decline in the year-ago period and besting the FactSet projection for a 1.5% decline.

Global Data Retail analyst Anthony Riva said in an August note, "The much smaller dip in revenues indicates that the business is going in the right direction and has gained momentum since the start of the year." After the retailer had worked to de-clutter its stores and streamline its merchandising, Riva suggested Kohl’s is now at the point where it could actually contemplate opening new stores in key areas.